Abstract

Mark A. Loewenstein and James R. Spletzer (1994) "Formal and
Informal Training: Evidence from the NLSY."

Although economists have long been aware of the importance of a worker's on-the-job
human capital investments, current knowledge about the quantity of on-the-job training and
its returns is still relatively scant. This paper analyzes the formal and informal
training information from four commonly used surveys, paying particular attention to the
1993 and 1994 data from the National Longitudinal Surveys of Youth. After accounting for
differences across surveys with regard to their sample population and the reference period
over which training is measured, the formal training responses appear quite consistent
across data sets. The same cannot be said for informal training, and the variation in the
incidence of informal training across surveys appears to be due to unsatisfactory routing
patterns in the household survey questionnaires. Nevertheless, the 1993 and 1994 NLSY
informal training data appear to be capturing quite a bit of human capital accumulation
that is missed by the formal training questions. When used together, the formal and
informal training measures can explain much, but not all, of an individual's within-job
wage growth.